If you want to know where the market is going, you needn’t take your chances gazing into a swirling, murky crystal ball. With feet firmly planted on the ground, we can see two solid indicators that—taken together—seem to paint a positive sign for the market.

Buybacks have been ramping up, and so has insider activity. Think about it: Buybacks are conceived and approved by boards of directors, who, using their deep knowledge of their own company and its future, believe that repurchasing shares in their own firm is in the best interest of the company and delivers the most value to shareholders. They know what is coming down the pike for that company, and they want to capitalize on it.

Insiders have the same perspective. They are usually the very same people (company executives and boards of directors), but this time they are putting their own money where their mouths are.

Stock repurchases among Standard & Poor’s 500 companies surged 80% in the first quarter (ending March 31, 2010) from the same time last year, totaling $55 billion. This was up from $48 billion in the [fourth quarter of 2009 and] $34. 8 billion in [last year’s third quarter.

The quarter-by-quarter momentum is palpable, fueled by wads of corporate cash: a record high $1.01 trillion in [the first quarter,] up from $811 billion at the end of the same quarter a year ago, according to S&P.

Buybacks (and dividends, too) may be in increasing favor as corporate executives are still jittery about the pace of the economic recovery, and might prefer repurchasing to spending cash on hiring, expanding, or acquiring competitors. These bloated coffers will also likely give them the financial flexibility to withstand another downturn (should there be one), better than the last one.

Silverblatt notes that the S&P expects to see buyback growth and expenditures outpacing dividends throughout the year, but remaining well below 2007’s record pace. While data has not yet been released for the second quarter of 2010, several major companies also announced buybacks during the quarter.

Meanwhile, insider activity remains favorable, as it has been for almost three months.

The overall trend has been bullish (accumulation) since lows in May. While insiders sold heavily at April market highs, that selling ended when the markets retreated, which suggests the insiders expected only a modest pullback (or else their selling would have ramped up).

In early June, when the markets rebounded, there was more new buying, and a lower July market low encouraged even more buying. The current earnings season mandates a slow down, since insiders don’t trade during this period.